Question

Organic Towel Exports (Scenario)

The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's. Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
Which of the following most strongly suggests OTC should not export its towels to Earth Waves?
A) OTC managers are risk-takers with the determination to expand OTC.
B) OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity.
C) Earth Waves has a large client base and publishes a semi-annual catalog.
D) Earth Waves has offered to guide OTC through Canadian regulations

Answer 1

OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity.

Step-by-step explanation:

The most strong suggestion that OTC should not export its towels to Earth Waves would be B) OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity.

This indicates that OTC may not have the production capacity to fulfill a large order from Earth Waves. If OTC is unable to meet the demand, it would not be advisable for the company to proceed with exporting its towels to Earth Waves.